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Over the years, Oracle's (NASDAQ: ORCL) CEO, Larry Ellison, has bulked up his company through aggressive M&A deals. Simply put, he thought there was too much capacity -- and valuations were affordable. Well, it looks like other mega tech companies are seeing the merits of this strategy. In fact, according to Reuters, it appears that this could be a big year for tech M&A.
And, there is certainly enough buying power, such as from companies like Cisco Systems (NASDAQ: CSCO), IBM (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ). Already, the deal-making is revving up. For example, IBM is in the process of paying a hefty all-cash premium for Sun Microsystems (NASDAQ: JAVA). There was also Cisco's $590 purchase of Pure Digital Technologies last week.
For investors, what might be some other targets? Of course, making preditions is always a dicey process, but Reuters points out several possibilities: Citrix Systems (NASDAQ: CTXS), NetApp (NASDAQ: NTAP), Brocade Communications (NASDAQ: BRCD) and Juniper Networks (NASDAQ: JNPR).
These are well-established companies that have a footprint in key categories like virtualization, network storage, and so on. And with valuations much lower now, big tech companies can leverage their balance sheets to easily boost market share and profits -- which certainly seems like a good use of corporate resources right now.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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